“Government Grants” Scams Alive and Well

Recently my office has seen a continuation of scams disguised as small business grants offered by the federal government. Several Texans report being contacted by strangers who claim they can help secure government grants from $5,000 to $50,000. The scammer will then ask for a processing or “consulting” fee of several hundreds or even thousands of dollars up front. The grant applicant might even be told that the fee is refundable if they do not qualify, making the offer even more tempting. After the money is paid, however, the scammer disappears and the grant never materializes.

Don’t be fooled.

If you are interested in applying for legitimate government grants, deal directly with the agency or program offering the money. It is generally not necessary to pay someone to help you through the process and most agencies provide assistance at no charge in filling out forms and explaining what it takes to qualify.

Scams involving bogus government grants seem to focus on low income families or small minority-owned businesses. This makes the scheme even more sinister because their victims are people who can least afford to lose their money.

Remember, government agencies will not call you or show up unexpectedly at your doorstep to offer you grants. If someone contacts you saying you qualify for a government grant, provided you pay money up front, simply hang up. You should also report the matter to my office immediately at 1-800-252-8011.

And if strangers knock on your door promoting one of these programs and ask for money up front, you should close the door and might even consider calling your local police department if they are roaming your neighborhood looking for victims.

To find out more about legitimate government grants and what it takes to qualify for them, go online to www.grants.gov or call 1-800-518-4726.

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.